[§428-409]  General standards of member's

and manager's conduct.  (a)  The only fiduciary duties a member owes to a

member-managed limited liability company and its other members are the duty of

loyalty and the duty of care imposed by subsections (b) and (c).

     (b)  A member's duty of loyalty to a

member-managed limited liability company and its other members is limited to

the following:

     (1)  To account to the company and to hold as trustee

for it any property, profit, or benefit derived by the member in the conduct or

winding up of the company's business or derived from a use by the member of the

company's property, including the appropriation of a company's opportunity;

     (2)  To refrain from dealing with the company in the

conduct or winding up of the company's business as or on behalf of a party

having an interest adverse to the company; and

     (3)  To refrain from competing with the company in the

conduct of the company's business before the dissolution of the company.

     (c)  A member's duty of care to a member-managed

limited liability company and its other members in the conduct of and winding

up of the company's business is limited to refraining from engaging in grossly

negligent or reckless conduct, intentional misconduct, or a knowing violation

of law.

     (d)  A member shall discharge the duties to a

member-managed limited liability company and its other members under this

chapter or under the operating agreement and exercise any rights consistent

with the obligation of good faith and fair dealing.

     (e)  A member of a member-managed limited

liability company does not violate a duty or obligation under this chapter or

under the operating agreement merely because the member's conduct furthers the

member's own interest.

     (f)  A member of a member-managed limited liability

company may lend money to and transact other business with the company.  As to

each loan or transaction, the rights and obligations of the member are the same

as those of a person who is not a member, subject to other applicable laws.

     (g)  This section applies to a person winding

up the limited liability company's business as the personal or legal

representative of the last surviving member as if the person were a member.

     (h)  In a manager-managed limited liability

company:

     (1)  A member who is not also a manager owes no duty

to the company or to the other members solely by reason of being a member;

     (2)  A manager is held to the same standards of

conduct prescribed for members in subsections (b) to (f);

     (3)  A member who pursuant to the operating agreement

exercises some or all of the rights of a manager in the management and conduct

of the company's business is held to the standards of conduct in subsections

(b) to (f) to the extent that the member exercises the managerial authority

vested in a manager by this chapter; and

     (4)  A manager is relieved of liability imposed by law

for violation of the standards prescribed by subsections (b) to (f) to the

extent of the managerial authority delegated to the members by the operating

agreement. [L 1996, c 92, pt of §1]